HKEX Chairman Carlson Tong: Investors Seek Diversification, Asia Expected to Continue Attracting Global Capital

HKEX Chairman Carlson Tong said at the Bund Summit that under the major trend of diversified global capital allocation, Asia will continue to be a destination for global capital. Asia has a lot of high-quality growth space, Asia has entrepreneurship, talent, and many very ambitious companies, especially in the artificial intelligence (AI) sector. Tong pointed out that due to the interaction of factors such as geopolitics, macroeconomic uncertainty, and over-concentration of capital allocation in the United States, global investors have different ideas about their capital allocation. They are all seeking alternative or other investment opportunities to achieve diversification of their allocations. In the first half of this year, 80% of IPOs issued in Hong Kong received support from global cornerstone investors, meaning they must hold these companies' shares for at least six months, which is a reflection of confidence in Hong Kong. Investors are not only looking at one market or one product; they are looking at the entire Asian market and hope to gain access to Asia's growth opportunities, so Asia will continue to be a convincing asset allocation destination in the future. On strengthening capital market connectivity, he said cross-border capital flows need to be enhanced. Allowing capital to flow across borders is very important because capital is seeking opportunities and needs to flow between different markets, so barriers need to be lowered and channels opened so that capital can flow. Currently, Stock Connect trading volume accounts for about 20% of the Hong Kong stock market's average daily turnover. The northbound Shanghai Stock Connect and Shenzhen Stock Connect have also contributed about 4% of domestic A-share trading volume. The Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, and Bond Connect are actually very effective in allowing capital to flow across borders in an orderly manner. He believes that the Asian region should not focus only on equities but should develop more diversified product portfolios, such as commodities and derivatives, because foreign investors need hedging and risk management. If such diversified tools are available, they will be more willing to invest.